User Account

All Pages

Determine how much the FRA is worth

Assignment Help Accounting Basics
Reference no: EM133066167

Question - A bank sells a "three against six" $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.66 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 4.955 percent. Determine how much the FRA is worth and who pays who-the buyer pays the seller or the seller pays the buyer.

Reference no: EM133066167

Questions Cloud

What is the opportunity cost of bread and steel : Assume that both the U.S. and Canada produce bread and steel. For each hour? worked, a U.S. worker can produce 4 loaves of? bread, or .4 tons of steel.
What was the accumulated value of fund at the end of year : Alicia deposited $14,500 into a fund at the beginning of every quarter for 17 years. What was the accumulated value of fund at the end of year
What is the marginal productivity of labor : Consider a water heater manufacturing company. The number of water heaters manufactured per day, q, is a function of the number of workers per day, L, and the n
Biological factors affect the criminal behavior : Do you think biological factors affect the criminal behavior of men and women differently or is it the same? Explain your position.
Determine how much the FRA is worth : Assume that three months from today the settlement rate is 4.955 percent. Determine how much the FRA is worth
Republican party national committee : You are the web master for the Republican Party National Committee. Prepare a risk assessment analysis for your website.
How much will Grecian Tile pay in interest over first year : If six-month LIBOR is 4.70 percent over the first six-month interval and 5.395 percent over the second six-month interval, how much will Grecian Tile pay
What is cyberloafing : Would you want a telecommuting job? Why or why not? What is cyberloafing? How is an employee differentiated from a contracter under US law?
Define several forms of metadata : Define several forms of metadata that can be useful to an investigation. How is it valuable to an investigator?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare the journal entry to amortize the leasehold

The leasehold expires in 15 years. Prepare the journal entry to amortize the leasehold at the end of the first year

  Calculate the amount of interest earned from the investment

Christine invested $2,100 at the beginning of every 6 months in an RRSP for 11 years. Calculate the amount of interest earned from the investment

  What is the number of times bond interest charges

Based on the data presented above, what is the number of times bond interest charges were earned (round to one decimal point)

  The firms hl and ll are identical except for their

the firms hl and ll are identical except for their debt-to-total-assets ratios and interest rates on debt. each has 20

  Purchased goods in transit, under terms fob

The inventory on hand at the end of 2010 for the Reddall Company is valued at a cost of $87,450. The following items were not included in this inventory:

  Which is not important practice in developing

Which is not important practice in developing and maintaining personal competency? Which is not an activity for managing information

  Freds electrical inc sells electrical parts to electrical

freds electrical inc. sells electrical parts to electrical contractors in the northwestern us. freds customers mail

  What are the direct labor costs for the period

Prime costs totaled $8,000. Conversion costs totaled $11,350. What are the direct labor costs for the period

  Prepare the adjusting entry on april

Cage Company has 10 employees, who earn a total of $2,900 in salaries each working day. Prepare the adjusting entry on April 30

  Determine the amount of the projected benefit obligation

At the end of 2011, there was no prior service cost and a negligible balance in net loss-AOCI. The actuary's discount rate was 10%.

  At what value will the bond sell

Tanner, Inc. issued a 10%, 5-year, $100,000 bond when the market rate of interest was 12%. At what value will the bond sell

  How much shares should be subscribed and actually paid

As per Articles of Incorporation the corporation has an authorized share capital of P60,000. How much shares should be subscribed and actually paid

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd